B.C.'s local governments are asking the province to tax AI data centres as light industry instead of as ordinary businesses. The Union of BC Municipalities (UBCM) voted in September to endorse the proposal from Mackenzie, where the mayor says reclassifying one data centre could roughly triple the town's tax revenue from it. The B.C. Finance Ministry says it reviews property classifications every year but has not committed to a change.
What municipalities are asking for
Data centres in B.C. are currently classed as businesses for property tax purposes, so they pay the same rate as a small business, according to The Tyee. UBCM voted in September to back Mackenzie's proposal that the province reclassify them as light industry. Mayor Joan Atkinson said the district's 80-megawatt Iren data facility "pays property taxes at the same rate a local coffee shop would," per CHEK News and Canadian Press-style coverage syndicated by the Prince Albert Daily Herald. She said reclassification could approximately triple what Mackenzie collects from the facility.
Atkinson also said: "Data processing is a pretty new industry in the province and in the country, and it's growing fast. So I think the government is just working to catch up."
Why Mackenzie is pushing
The Tyee reports that Mackenzie lost 425 jobs after mill closures in 2019 and 2020. Earlier CBC reporting said the town lost $1.7 million in heavy industry tax revenue in a year because of the forestry decline. With a municipal budget of about $15 million, it had closed its recreation centre on Sundays. Iren's chief operating officer told CBC the company supports assessing data centres' taxable values and said its Mackenzie facility provides $250,000 a year in community grants.
The scale of the buildout
Hyperscale AI data centres draw roughly 100 megawatts, enough to power up to 75,000 homes, according to the Daily Herald copy. They also need water for cooling and can create noise and heat. Canada has five hyperscale data centres, two of them in B.C. Telus plans expansions in Kamloops and Vancouver, and Bell Canada has proposed a six-centre supercluster drawing more than 500 megawatts.
Mairin Loewen, associate director of MakeWay's Urban Climate Leadership project, called data centres "such a new land use" that it "presents a real administrative challenge." She suggested municipalities also seek "robust community benefits agreements" so residents benefit over the long term.
The province's response
A B.C. Finance Ministry spokesperson said the government reviews property classifications annually but made no commitment to the municipalities' request.
Why it matters for business readers
Property tax class is a direct operating cost for data centre builders. A move to light industry would raise the tax bill and could change where companies site projects, particularly in small towns that want revenue to cover new infrastructure demands. The ministry has made no commitment, so this is a signal of local pressure, not a rule change. Companies planning projects in B.C. should watch the annual classification review. We covered Bell Canada's data centre construction milestone earlier this week.
FAQ
What are B.C. local governments asking for?
They want the province to classify AI data centres as light industry for property tax purposes instead of as businesses. UBCM voted in September to endorse the proposal.
How much more would a data centre pay?
Mackenzie's mayor says reclassification would approximately triple the town's tax revenue from the Iren facility. No province-wide figure was reported.
Has the province agreed?
No. The Finance Ministry said it reviews classifications annually but did not commit to the change.